Income taxes - The fool's game

F. Kelly

[Your Nightmare]

How is the sales tax, that everyone must pay and is keenly reminded of, "hidden"?

Because that's only 70% of what they are paying.

[CSM]

Can you explain what you mean? I don't have any idea what you're saying.....

[Your Nightmare]

Can you explain what you mean? I don't have any idea what you're saying.....

Only 70% of the taxes collected by the FairTax would be paid by customers at the register. The other 30% will be paid by taxing government expenditures which those governments will in turn pass on to their citizens (us) in the form of higher taxes. Only people can pay taxes, it has to get back to us eventually.

If you want to know what we would really be paying in federal taxes based on our consumption, the tax base for the FairTax excluding government consumption in 2001 was $4,721 billion. The taxes being replaced were $1,857 billion. We will effectively be paying a sales tax rate of 39.5%, not 29.87% (that's 28.3% inclusive vs 23% inclusive for you Kool-Aid drinkers).

[Badray]

In all the critics calculations, they overlook or try to ignore the fact that the economy is dynamic, not static. Anytime you want to increase tax revenue, lower the rate.

With imbedded tax cost gone, costs will come down. Income will go up (it's no longer being confiscated). Sales will increase. Tax revenues will increase.

Do you ever hear people gripe about working overtime? They hate it because the tax man gets so much of it. In the new economy that this will produce, overtime will really mean something to them. Unions that fight this proposal will face extinction when workers realize the benefits that they were told to forego.

[CSM]

I still don't understand how you are equating the state/local government agencies requirement to pay the NRST with today's "hidden" taxes. I do understand your concern about the percieved tax increases associated with these agencies paying the NRST, but I still don't see it as "hidden".

Well, not anymore than the typical Democrat believes Gov. Granholm when she blames the President for the lagging of MI's economy when compared to the rest of the country. The rhetoric for socialism will always persist, but the best weapon against this rhetoric is knowledge. The NRST is a great way to make people knowledgeable as to the costs of government entitlements.....

[CSM]

I agree, there is no pie to be divided up, or to have shares fought over. RR proved the thoughts supporting that POV to be incorrect.

[Your Nightmare]

I still don't understand how you are equating the state/local government agencies requirement to pay the NRST with today's "hidden" taxes. I do understand your concern about the percieved tax increases associated with these agencies paying the NRST, but I still don't see it as "hidden".

How is a business being charge a tax by the feds and making you pay it through higher taxes any different than the states being charged a tax and making you pay it through higher state taxes? Aren't they both hidden federal taxes?

[CSM]

Anything the States purchase today has the imbedded tax. Specifically, the sales tax would become a line item in their expenses, just as it would be for individuals, and it would be readily accessible by the State's residents. They would still have access to the budget planning and budget spend, just as they do today.

Even if I were to agree that this 30% you reference is "hidden", wouldn't that be a significant improvement over the 100% hidden amount today?

[Your Nightmare]

Specifically, the sales tax would become a line item in their expenses, just as it would be for individuals, and it would be readily accessible by the State's residents.,/I>

How would that tell me how much I paid in federal taxes through my state and local taxes? What you are suggesting could be done today by looking at the total amount of federal corporate income tax paid, but what does that really tell you?

Even if I were to agree that this 30% you reference is "hidden", wouldn't that be a significant improvement over the 100% hidden amount today?

100% hidden? How is today's tax 100% hidden?

[det dweller too]

Excuse me for jumping in, but income taxes are hidden because they are not dependent on an event like a salees tax is, they accumulate over the entire year. The business also knows the taxes must be paid before the workers or shareholders get anything. the pricing of any sales must account for this tax revenue. So even if the workers are at 0% income tax, the products their company produces has a large part of the cost going to the hidden tax. If he is an American worker making widgets, he may find the widgets are cheaper coming from overseas. Then his company gives him a delima. They must cut costs to compete with china's widgets and so that benefit package he was counting on will be eliminated, if he is lucky. If not lucky, maybe his job goes away. And the politicians and union leaders all blame it on the evil and greedy company owners

This hidden tax business is a bitch!

[Badray]

Yep. It's that simple, but some refuse to see.

[Mikey]

Also the underground economy pays equally as well. (I.E., drug dealers, hookers, etc.)

[Mikey]

"Once politics become a tug-of-war for shares in the income pie, decent government is impossible."
Friedrich A. Hayek